Bridge Loan & Bridging Finance Calculator

A bridge loan (known as bridging finance in the UK) is a short-term, interest-only loan lasting 6 to 18 months designed to bridge a capital timing gap. When buying a new home before selling your current property, a bridge loan secures financing against your existing equity so you can close without a sale contingency. Once your existing home sells, the proceeds repay the bridge loan principal in full.

In 2026, US commercial bridge loan rates generally range from 8.5% to 12.5% APR (frequently structured as 30-day SOFR + 350 to 650 basis points) depending on asset class, sponsor track record, and debt yield. In the UK, monthly rates range between 0.5% and 1.2% per month. Lenders typically charge 1% to 2% in upfront arrangement or origination points, plus legal, valuation, and exit/administration fees.

Because bridge loans are non-amortizing interest-only facilities, the calculation formula is: Monthly Payment = (Loan Amount × Annual Interest Rate) / 12. For instance, on a $500,000 commercial bridge facility at 9.6% APR: ($500,000 × 0.096) / 12 = $4,000/month. For monthly quote structures (e.g., 0.8%/month), multiply directly: $500,000 × 0.008 = $4,000/month.

Yes, virtually all bridge loans are interest-only. If you select "rolled-up" (capitalized) or "retained" interest, you do not pay out-of-pocket interest every month. Instead, the interest either accumulates onto the loan balance or is held back from initial proceeds, allowing developers and buyers to preserve working capital until the property is sold or refinanced.

Yes. Fix-and-flip and BRRRR investors routinely use bridge loans (hard money bridge debt) to fund both property acquisitions (up to 85%–90% LTC) and 100% of construction costs. Once renovation is completed and the asset is leased, investors exit the bridge loan by refinancing into a permanent 30-year DSCR rental loan or selling the completed home.

Speed is the primary advantage of bridge financing. While conventional Fannie Mae or commercial bank loans can take 45 to 90 days, specialized private bridge lenders can underwrite, appraise, and fund transactions in as little as 5 to 14 business days, meeting urgent closing or auction deadlines.

Major high-street and money-center banks (like HSBC, Barclays, Chase, and Wells Fargo) occasionally offer bridge facilities for premier private wealth or established corporate clients, but their underwriting processes are lengthy. The vast majority of investors rely on dedicated specialty bridge lenders and debt funds for speed, higher LTV leverage, and flexible asset-based underwriting.